Friday, March 17, 2017

Christopher Ruddy's alt-Trump

Christopher Ruddy, Trump buddy and CEO of the gaslight site Newsmax, wantonly misrepresents the ACA while proposing what he regards as a Tumpian alternative to "Ryan Care II" (for which Trump has now gone all-in, flaunting his powers of intimidation even as he yields to right-wing demands that the bill un-insure millions more swiftly).

Let's leave the lie-specking for later (see bottom).  Buddy Ruddy does Trump the doubtless undeserved honor of crediting his stated intentions for health reform as expressed in, for example, Trump's January 15 Washington Post interview:
“We’re going to have insurance for everybody,” Trump said. “There was a philosophy in some circles that if you can’t pay for it, you don’t get it. That’s not going to happen with us.” People covered under the law “can expect to have great health care. It will be in a much simplified form. Much less expensive and much better.”
Also promised: "lower numbers, much lower deductibles."

There is only one mode of healthcare delivery in the U.S. that can deliver on those promises. And lo, Ruddy makes it his centerpiece -- Point 4 in a 7-point program:

Reject the phony private health insurance market as the panacea. Look to an upgraded Medicaid system to become the country's blanket insurer for the uninsured.
I'm with Ruddy there. In fact, ever since Trump made those promises (in earlier iterations) I've noted that wittingly or not -- most likely not -- he was effectively committing himself (leaving aside that that his commitments are worthless) to some variant of Medicaid-for-all-who-need-it. In November, I suggested that
done right, a program like managed Medicaid for anyone who needs it, with a buy-in for people at higher income levels, would be preferable to the ACA marketplace. The difference would be that government would effectively set the prices that the managed Medicaid companies pay to hospitals and doctors, and set them very low – at least at first. If significant numbers of not-poor people bought in, pressure would probably rise to raise payment rates to bring more providers in.*
A compromise, preserving a chunk of Ryancare (the AHCA) would be to offer a Medicaid buy-in up to a certain income level -- say, 300% FPL -- and offer Ryan's age-adjusted premium subsidies in the individual market to insurance seekers above that threshold. In December, I proposed this kind of graft of expanded Medicaid and Tom Price's ACA replacement plan, which provides skimpier age-adjusted subsidies than the AHCA, in a more thoroughly deregulated market. The graft would work better with Ryancare. People over 300% FPL would for the most part do better under the AHCA than with the ACA, though that's not the case for older buyers in the 300-400% FPL slot.  Capping premiums as a percentage of income would be preferable.

It's important to note that the "Medicaid" in an expanded program -- doubtless not called that -- would be offered in a "marketplace" in which managed care providers compete. A model of sorts exists in the Basic Health Programs established under the ACA by Minnesota and New York for residents with incomes up to 200% FPL. Both are a kind of Medicaid-plus (see my November post for more about each). In New York's program, insurers pay providers Medicaid +20%; I'm not sure whether rates in MinnesotaCare are higher than in the state's Medicaid program.  But the program long predates the ACA -- it used to be offered up to 275% FPL, in fact -- and is well regarded, lacking the stigma that many middle class people attach to Medicaid.  Also noteworthy: it charges higher income enrollees fairly substantial premiums, topping out at $80 per month (as opposed to about $125 per month that ACA marketplace enrollees pay for benchmark silver at an income of 200% FPL).  If a buy-in to such a program were offered to 300% FPL, or to any income level, a premium and AV schedule could be devised, I would think, that would make the program cheaper for the federal treasury than the ACA marketplace.

I admit that there's close to zero chance that Trump will turn to an expansion of Medicaid. Unlike Ruddy, I don't think Trump's "insure everyone" promises are worth a tub of Trump Network vitamins. In contrast to his rhetoric, all his deeds show a gleeful willingness to strip bare any government program or action that aids anyone but the superwealthy. Moreover, he's moved the opposite direction this week, cracking a bullwhip Ryancare while granting Freedom Caucus wishes to make it even more Draconian.

But if Trump did want to improve healthcare access for those he duped in this election, Medicaid would be a natural go-to vehicle.
For the record, here are Ruddy's main misrepresentations of the ACA:

1) The ACA "mandated that every adult citizen purchase private insurance in these uncompetitive state markets." That is, every nonelderly adult who lacks access to employer-sponsored insurance, Medicaid or other insurance, and for whom marketplace coverage meets the ACA's affordability criteria -- under 10% of the population. In fact, the individual mandate induced millions to enroll in Medicaid and employer-sponsored insurance as well as in individual market plans

2) "The legislation provided no caps on profits or cost controls." In fact, the ACA mandates that  insurers spend at least 80% of premium revenue on medical care for enrollees in the individual and small group markets, and 85% in the large group market. It also banned medical underwriting -- previously the chief means of generating profits in the individual market; slapped a tax on all health insurers; and cut payment rates in the Medicare Advantage program.  As for cost controls: the brutal logic of competition in the ACA-compliant individual market is favoring insurers that pay providers something close to Medicaid rates, and thus field very narrow networks.

3) According to Ruddy, "The newly insured under the Obamacare umbrella discovered that their basic care was never actually covered, because deductibles for their private insurance were raised. The sick ended up having to pay more in out of pocket expenses than before Obamacare." In fact most of the newly insured in the marketplace are low income, and about 85% of marketplace enrollees with incomes under 200% FPL accessed Cost Sharing Reduction subsidies that made their coverage more comprehensive than that provided by the average employer-sponsored plan. Then there were some 12 million who gained Medicaid access, with close to no out-of-pocket expense. It's true that many of the unsubsidized or lightly subsidized became subject to higher deductibles than they paid, or would have paid, in the pre-ACA market. But the vast majority of the "uninsured" did not.

1 comment:

  1. Good points all, and it is good for you to keep raising these alternative scenarios using Medicaid or even Medicare. I am convinced that we will see a state or maybe several states that have no private insurers in the game either off or on exchange. When that happens, well, states like MN and NY that are willing to raise taxes will pay the carriers to stay around. I am not sure if the red states can do that politically. The electorate in those states is strongly and ignorantly anti-tax.

    Using Medicaid as a public option does have some huge hurdles:

    - funding it at about $6,500 per beneficiary
    - paying doctors enough to accept it
    - accepting losses if claims exceed premiums

    But this would be true in any public program. Keep on proposing!